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Yangtze port strategy undergoes quiet shift
2009/3/17
The central government''s continued investment in transport infrastructure and the rapid pace of industrialisation in the country''s vast interior has brought about a quiet revolution in the strategy of port management along the Yangtze River, the South China Morning Post reported.
Shanghai International Port Group (SIPG) has agreed to cede its majority stake in Wuhan Port Group, the city''s largest operator, at the request of the local government.
The largest investor in the Yangtze ports over the past decade, SIPG has also withdrawn from Chongqing Cuntan Container Terminal because of "political pressure" soon after it had signed a 50-50 joint venture agreement.
Rumours have intensified that the Hubei provincial government is unhappy about Hong Kong-listed PYI Corp''s 51 percent stake in Yichang Port Group, an important transhipment hub in the middle reaches, signed in September last year.
After nearly 10 years of decentralisation and unprecedented levels of investment, local governments have come to realise that port development plays a vital role in rejuvenating local industries. Where huge capital investment is necessary to accommodate future industrial expansion, the commercial interests of outside majority shareholders can often hinder rather than facilitate growth.
Monopoly and contractual issues aside, SIPG is described by some government officials as "a constant source of frustration". Its investment strategy, driven by the need to take the lion''s share of containers shipped on the Yangtze to feed Shanghai''s Yangshan Container Terminal, means that it has little interest beyond containers.
The provincial and city governments wanted Wuhan''s largest port operator to play a leading role in its new stage of development, but SIPG was said to be dragging its feet
Unlike their western counterparts, mainland port operators are required to build the terminals first before they can operate them.
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2009/3/18